Comair Limited FY 2012 results


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Comair Limited FY 2012 results

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Comair Limited FY 2012 results

  1. 1. Unaudited Interim Results and Interim Cash Dividend Declaration for the six months ending 31 December 2012 origin existence invention application exploration the next great step... K-10497[] Performance review The turnaround in profitability that commenced in the second half of the 2012 financial year has continued into the six months to December 2012, and has resulted in a profit after tax of R79 million for the period, a significant improvement on the results of the comparative period. While it took time to adequately address the effect of higher operating costs, brought on predominantly by the rapid escalation of the fuel price in 2011, we are now accommodating an oil price of over $110 per barrel and do not anticipate a reduction in this price in the near future. Revenue grew by 20%, mainly attributable to the fuel surcharge on British Airways tickets and kulula’s improved pricing capability and revenue integrity processes emanating from its new inventory management system. The four new Boeing 737-800s, introduced during the period, further contributed to increased revenue per flight, while at the same time improving fuel efficiency. Our in-house catering facility and other cost saving initiatives continued to deliver meaningful results. Earnings per share and headline earnings per share grew to 16.4 cents (prior period loss of 7.1 cents and headline loss of 4.9 cents) and cash generation was particularly strong due to the tax allowances on the new aircraft, as well as abnormally good advance ticket sales in December, resulting in a cash balance of R529 million at 31 December 2012. The four new aircraft were brought onto the statement of financial position during the period, funded with US Export-Import Bank backed loans, which ensured excellent financing rates. We are particularly proud of the fact that the turnaround in profitability was achieved without the retrenchment of any staff, largely as result of their own commitment towards implementing the changes required to turn the business around. Prospects The total domestic passenger market has shown year-on-year shrinkage since February 2012, with the half year volumes for the market 6% lower than for the comparative period. The continued devaluation of the Rand has driven the Rand price of fuel and Dollar-based technical services to record levels, and therefore we do not foresee early growth in market volumes as ticket prices will remain at the levels necessary to recover such escalating costs. We also do not anticipate any near- term recovery in global or local consumer spending. However, our new enterprise-wide IT platform and the new fleet, which were only in operation for a portion of the reporting period, offer further opportunities for improved revenue and operating efficiency that will be fully optimised over the next few years. Flights from Johannesburg (ORTIA) to East London on the kulula brand will commence on 1 March 2013, and flights from Johannesburg to Maputo on the British Airways brand from May 2013. There are also good growth opportunities for our travel business, flight training facility, catering business and airport lounges. We are therefore cautiously optimistic for further improvements to profitability and cash generation in the second half of the 2013 financial year. The above outlook has not been reviewed and reported on by Comair’s external auditors and does not constitute an earnings forecast. Dividend Contrary to past practice and in light of the Company’s improved trading results, notice is hereby given that a gross interim cash dividend of 5.0 cents per ordinary share has been declared payable to shareholders. The dividend has been declared out of income reserves. STC Credits of R5 640 412 (equating to 1.15304 cents per share) are available to be utilised as part of this declaration. The gross dividend will be subject to a local dividend tax rate of 15.00% but the effective rate is brought down to 11.54% once STC Credits have been applied resulting in a net dividend of 4.42296 cents per ordinary share, unless the shareholder is exempt from paying dividend tax or is entitled to a reduced rate in terms of the applicable double tax agreement. The Company’s tax reference number is 9281/874/1/0 and the number of ordinary shares in issue at the date of this declaration is 489,176,471. In accordance with the provisions of Strate, the electronic settlement and custody system used by the JSE Limited, the relevant dates for the dividend are as follows: Share certificates may not be dematerialised or rematerialised between Monday, 11 March 2013 and Friday, 15 March 2013, both days inclusive. Directors’ resignations and appointments Derek Henry Borer was appointed as an Alternate Director to Rodney Cyril Sacks, an Independent Non-executive Director, on 17 October 2012. Alan Buchanan, a Non-executive Director, having left the employ of British Airways, resigned as a Board Member on 27 November 2012. Basis of preparation In terms of the Listings Requirements of the JSE Limited, the Group has prepared its consolidated interim results in accordance with International Financial Reporting Standards, including IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the requirements of the Companies Act, Act No. 71 of 2008. The accounting policies used in the preparation of these results are consistent in all material aspects with those used for the previous Annual Financial Statements. These Unaudited Interim Group Results were prepared by R Yasas Sri-Chandana, Financial Director, Comair Limited. Event Date Last day to trade (cum dividend) Friday, 8 March 2013 Shares commence trading (ex dividend) Monday, 11 March 2013 Record date (date shareholders recorded in books) Friday, 15 March 2013 Payment date Monday, 18 March 2013 By order of the Board Mr P van Hoven (Chairman) Mr ER Venter (CEO) 11 February 2013 Address and Registered Office 1 Marignane Drive Bonaero Park 1619 PO Box 7015 Bonaero Park 1622 Transfer Office Computershare Investor Services (Pty) Ltd 70 Marshall Street Johannesburg 2001 PO Box 61051 Marshalltown 2107 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited)
  2. 2. origin existence invention application exploration next great step Abridged Group Statement of Comprehensive Income Unaudited six months 31 Dec 2012 R‘000 Unaudited six months 31 Dec 2011 R‘000 Audited year 30 June 2012 R‘000 Revenue 2,411,335 2,053,784 4,162,938 Operating expenses (2,176,919) (1,998,192) (3,974,163) Operating profit before depreciation 234,416 55,592 188,775 Depreciation (110,113) (85,083) (153,270) Impairment - - (4,049) Loss on sale of assets - (10,669) (10,669) Profit (loss) before interest, dividend and taxation 124,303 (40,160) 20,787 Interest income 7,523 4,497 8,200 Interest expense (23,499) (11,135) (19,433) Share of profit of associates 426 1,856 1,329 Profit (loss) before taxation 108,753 (44,942) 10,883 Taxation (29,625) 10,776 (3,202) Profit (loss) for the period 79,128 (34,166) 7,681 Other comprehensive gain Fair value adjustment on cash flow hedge - 395 395 Total comprehensive profit (loss) for the period attributable to the equity holders of the parent 79,128 (33,771) 8,076 Earnings (loss) per share (cents) 16.4 (7.1) 1.6 Headline earnings (loss) per share (cents) 16.4 (4.9) 3.8 Diluted earnings (loss) per share (cents) 16.4 (7.1) 1.6 Diluted headline earnings (loss) per share (cents) 16.4 (4.9) 3.8 Dividends per share 0.0 0.0 0.0 Actual number of shares in issue ('000) 489,176 489,176 489,176 Weighted ordinary shares in issue ('000) 483,028 481,484 483,028 Diluted weighted ordinary shares in issue ('000) 483,055 482,464 483,055 Reconciliation between earnings and headline earnings Profit (loss) after tax attributable to the equity holders of the parent 79,128 (34,166) 7,681 Add: IAS 16 loss on disposal of property, plant and equipment after taxation - 10,669 10,669 Add: IAS 16 impairment to assets - - 4,049 Less: tax effect of re-measurement adjustments - - (4,121) Headline earnings (loss) attributable to ordinary shareholders 79,128 (23,497) 18,278 Abridged Group Statement of Financial Position At 31 Dec 2012 At 31 Dec 2011 At 30 June 2012 Assets Property, plant and equipment 2,381,578 1,375,284 1,432,509 Intangible assets 51,307 - 51,515 Investments in associates 9,293 - 8,717 Goodwill 3,668 3,668 3,668 Current assets 1,101,409 641,909 709,358 3,547,255 2,020,861 2,205,767 Equity and liabilities Share capital and reserves 895,303 768,464 814,461 Interest-bearing liabilities 1,258,360 310,663 85,907 Deferred taxation 120,562 108,174 99,039 Current liabilities 1,273,030 833,560 1,206,360 3,547,255 2,020,861 2,205,767 Net asset value per share (cents) 183.0 157.1 166.5 Abridged Group Statement of Cash Flows Unaudited six months 31 Dec 2012 R‘000 Unaudited six months 31 Dec 2011 R‘000 Audited year 30 June 2012 R‘000 Cash and cash equivalents at the beginning of the period 246,095 234,031 234,031 Cash from operations and investment income 262,672 161,809 278,197 Tax refunded (paid) 9,158 1,198 (4,971) Cash utilised in investing activities (1,059,826) (100,284) (134,388) Cash generated by (utilised in) financing activities 1,071,281 (41,956) (126,774) Cash and cash equivalents at the end of the period 529,380 254,798 246,095 Abridged Group Segment Report Segmental revenue Airline 2,378,148 2,024,907 4,076,004 Non-airline 33,187 28,877 86,934 2,411,335 2,053,784 4,162,938 Segmental results Airline 222,419 40,520 169,705 Non-airline 11,997 15,072 19,070 Operating profit before depreciation, impairment and loss on sale of assets 234,416 55,592 188,775 Depreciation – Airline (107,731) (79,810) (148,030) Depreciation – Non-airline (2,382) (5,273) (5,240) Impairment – Airline - - (4,049) Loss on sale of assets – Airline - (10,669) (10,669) Profit (loss) before interest, dividend and taxation 124,303 (40,160) 20,787 Segmental assets – Airline 3,376,252 1,894,964 2,039,582 Segmental assets – Non-airline 171,003 125,897 166,185 Segmental liabilities – Airline (2,552,405) (1,156,531) (1,295,250) Segmental liabilities – Non-airline (99,547) (95,866) (96,056) Segmental capital additions – Airline (excluding borrowing costs capitalised) 1,041,035 143,877 305,161 Segmental capital additions – Non-airline 2,398 7,551 3,046 Abridged Group Statement of Changes in Equity Opening balance 814,461 800,521 800,521 Total comprehensive income (loss) for the period 79,128 (33,771) 8,076 Equity settled share-based payment adjustment 1,714 1,714 3,428 Net effect of share trust activities - - 2,436 895,303 768,464 814,461 Comair Limited Unaudited Interim Results and Interim Cash Dividend Declaration for the six months ending 31 December 2012. Incorporated in the Republic of South Africa | Registration number: 1967/006783/06 | Share code: COM. | ISIN code: ZAE000029823. (“Comair” or “the Company” or “the Group”)